Facebook should Buy Skype not Google

There is a strong rumor circulating in the blogosphere about Facebook and Google negotiating a buyout/partnership with Skype. Skype is planning an IPO sometimes second half of this year. Looks like these strategic discussions might jeopardize the IPO route. Maybe they are looking for a different exit than IPO. Either way it’s going to be good news for Skype investors. Now coming back to who should Skype align with? It makes lot of sense for Facebook to buy/partner with Skype instead of Google. Off course Google is better positioned in terms of who can milk more than half a billion users than Facebook. Beyond that I don’t see any synergy between Google and Skype.

Here is why I think it makes more sense for Facebook to acquire Skype:

• Enhance their messaging platform with support for Voice and Video powered by Skype. Off course facebook can develop its own Voice and Video infrastructure. Too me it’s a stretch. Instead by buying Skype they get instant access to VoIP/SMS/Video features
• Support Voice/Video will boost the messaging platform, which doesn’t seem to have gained much traction
• With Skype Acquisition they also get QIK Live streaming capabilities. That’s an added plus
• Instant Access to more than 500 million users. The chances of Skype users having Facebook account are high. There might be an overlap
• Facebook can really become a global operator providing Voice/SMS/Video/IM communication to all its users. Off course PSTN access will still be short coming, a partnership with one of the operator can offset this shortcoming
• A Facebook phone becomes a reality. Most of the operators are moving towards 4G/LTE, it’s a matter of time that all Voice calls will be carried via IP network. With a partnership with one of the access network, facebook’s ambitious phone becomes a reality. So constant monthly revenue for basic phone service becomes a reality. Voila!
• Patronize Innovation by opening up the Skype platform for developers (Telco 2.0 Platform). Something similar to Twilio, Voxeo etc
• Who said Facebook is only for Consumer market, with Skype acquisition they can venture into Enterprise market and become a threat to some of the incumbent Video/VoIP provider like Avaya, Cisco etc
• According to CDC Straw Poll 75% of the companies will adopt , Video Conferencing by 2012. Skype already supports consumer video conferencing which can be extended /enhanced for enterprise
• Voice conferencing is another big Enterprise feature. So armed with these powerful features, facebook can look beyond consumer market
• It makes sense to have different revenue stream instead of relying only on advertisements
• Everybody wants a piece of Facebooks social graph including operators. T-Mobiles recently launched Bobsled, a one touch calling within Facebook. In fact Facebook can do a better job than Third Party service providers.

Here is why I think it doesn’t make sense for Skype to go with Google:

• Google already has its own VoIP client (Google Talk), which supports SMS/Voice/Video. They recently launched video calling for android .
• Has partnership with sprint for Google Voice. So they are ahead of the curve in terms to infrastructure and partnership
• Except for the number of users they get access to most of the technology and infrastructure becomes redundant. Iam not discounting the P2P arch of Skype. That’s a big asset to own. P2P has its own issues with respect to Lawful Intercept and security to name a few.
• Google is already competing with Skype. It would have made sense if Skype was a small player where in Google could have acquired them and killed the product. That’s not the case here. Skype is the biggest Global VoIP player in the market.
• They have in-house VoIP technical expertise inherited with the acquisition of Grand Central and Gizmo.

I would love to see a Facebook Skype acquisition/partnership. Let me know what you folks think.